China's increased voting power in the International Monetary
Fund (IMF) highlights its growing influence on the world stage,
according to a Chinese economics expert.
"The greater share of the vote not only means it can receive
more loans from the organization, but also create a more favorable
environment for developing countries, said Tan Yaling, of the China
International Economic Relations Council.
The IMF's Board of Governors approved a resolution on Monday to
give more voting power to China, South Korea, Mexico and Turkey.
China now has 3.72 percent of the voting share, up from 2.98
percent.
Tan admitted that the seven major industrialized countries,
including the United States and Japan, still dominate the IMF as
well as the international finance market. "The increase from 2.98
percent to 3.7 percent has only a symbolic meaning for China to
some extent," she said, "but it is China's right to have a greater
say in the IMF as its economy has been booming for the past two
decades."
Before the reform, China had less voting clout than Belgium and
the Netherlands combined. Its GDP, however, is twice the two
countries' sum.
The voting reform is just a small step towards a more reasonable
international financial order, but it will only play a very limited
role in solving the problem of global economic imbalance, said Fang
Ming, senior analyst with the Bank of China.
China should be very cautious about IMF reform and a more
important task for China is to push for a change in the
international financial order in a just and reasonable direction,
said He Fan, an expert with the China Academy of Social
Sciences.
The United States wants to strengthen coordination with
developing countries through IMF reform, He said.
Increased voting power in the IMF means greater
responsibilities, so China may face greater pressure from western
countries to liberalize its own exchange rate regime, according to
He.
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The 184-member IMF, created to inject stability into the ruins of
the post-war financial system, remains dominated by the United
States, European countries and Japan.
But developing countries are beginning to play a greater role.
"These reforms are the first step in a process that will increase
the representation of many emerging market countries to reflect
their increased weight in the global economy," said IMF Managing
Director Rodrigo de Rato.
(Xinhua News Agency September 21, 2006)
